1 a portfolio has 40 of its value in ibm shares and the, Ask an Expert

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1. A portfolio has 40% of its value in IBM shares and the rest in Microsoft (MSFT). The volatility of IBM and MSFT are 40% and 30%, respectively, and the correlation between IBM and MSFT is -0.3. What is the standard deviation of the portfolio?

2. An investor estimates the following input data for a two-security (risky) portfolio, which is comprised of a Stock Fund (S) and a Bond Fund (B): E(RS) = 10% E(RB)= 5% Std. Dev. S = 19% Std. Dev. B = 8% P(s,b) = 0.20 Based on these estimates, what is the portfolio's standard deviation?

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Financial Management, Finance

Category:- Financial Management
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